Category "Taxes, The Commons & The Social Contract"

I’ve been hearing a lot of uninformed and misinformed internet chatter recently on the subject of the minimum wage. The lack of any political resolve to deal with it has reminded me that we have in the past had politicians in possession of sufficient courage to do what is right on the subject of worker payment.

Franklin D. Roosevelt spoke eloquently and acted decisively on the matter. FDR declared in no uncertain terms that businesses which refused to pay a living wage to workers had no place in America. He acted to secure for workers the right to organize on their own behalf, a right corporations had enjoyed in the form of incorporation with limitless abandon, but had vigorously opposed for their employees, and mostly still oppose today. Yes, this means UNIONS.

He successfully introduced and convinced Congress to enact a federal minimum wage for the first time in US history. It was a modest effort at that point, but was clearly intended to be improved to the point of creating a living wage.

Then, in January of 1941, FDR unveiled one of the most inspired and impassioned speeches he ever gave on the subject of rights. It was the 1941 State of the Union speech, but is widely remembered as the Four Freedoms Speech. In it, he enumerated and discussed the freedoms that are central to the sustenance of any democratic society. Two of the freedoms he discussed were freedom of speech and freedom of worship, paralleling the First Amendment to the Constitution. The other two, the real and unique core of his contribution to the advancement of freedom, were Freedom from Want, and Freedom from Fear. (For more on this, read historian Harvey J. Kaye’s work FDR and the Fight For The Four Freedoms).

These sound abstract, or even Utopian, but Franklin Roosevelt was a pragmatic political thinker and doer, not a purveyor of pie in the sky. Our understanding of these principles becomes much more concrete when we grasp the fact that we have the means to do something about economic inequality and poverty. There are real socially and macro-economically effective steps that can be taken to combat want, the lack of basic needs in this country. NO ONE working a full time job in America should be living in poverty.

One of those things is to increase the minimum wage, so that it gradually becomes a real living wage. Even if we merely increase it until it equals the buying power it had at its previous peak in 1968, it would have a profound effect. Even if you completely ignore technological productivity factors, it would be around eleven dollars per hour. We must note, though, that this math is very conservative, because inflation indices from the Congressional Budget Office do not factor in food costs (because they say those are seasonal-despite the fact that most food budgets of low income people include very few or no seasonal products), or medical expenses, because they are volatile (although there is a clear trajectory to observe there too).

According to a study by the Center for Economic and Policy Research done in March, 2013, a real calculation of value of hourly work compared with 1968 would produce a minimum wage of $21.72/hr today. Between FDR’s time and the late 1960s, both wages and productivity grew steadily. Since then however, only productivity has grown significantly, with few and paltry wage increases, seen mostly as band-aids on US poverty.

No one is proposing anything near that. But even the $15 an hour minimum wage that is being put forward as an eventual ideal now would have profound positive effects on the lives of millions of people and on the economy.

Before we get into those, let me be crystal clear on the subject of jobs. There are no reputable or credible studies that demonstrate a significant job loss ensuing from a minimum wage increase.

Business interests who sell expensive products to well compensated people often employ people for low money to make their products. They have a vested interest in keeping wages low. These special interests have historically warned that wage increases would lead to job loss. This has never once proven true.

The people of the United States must recognize that the interests of the National Association of Manufacturers are NOT the same as our nation’s interests.

Now, lets touch on some points in favor of raising the minimum wage:

If we increase the minimum wage enough, millions of people would be free of the need for federal and state food assistance. The tax money that now goes to food assistance could be spent instead on infrastructure, education, and paying down the national debt. Not only would raising wages not cost taxpayers a dime, it would save many millions of federal dollars in that way alone.

Then there is the spending effect. We’ll get to that in a minute.

The current federal minimum wage provides a full time employee with a pre-deduction income of roughly $15,000 Dollars per year. This is NOT enough money after deductions (taxes, health insurance, FICA . . .) for even a single person to live independently in any state in the union.

(Never mind the facts, kneejerk rightwing website Breitbart threatened that increasing the minimum wage would cause 20-30 year-olds to lose their jobs and move back in with their parents. That would be scary, except that many already must live with parents despite working full time! Back to the drawing board, fearmongers).

The spending effect: Since most people who would be affected by a wage increase from the current $7.25/hour federal minimum are desperate, they would not be socking their newfound riches away in offshore bank accounts. They would buy luxurious items like fresh vegetables, children’s shoes, car repairs, work clothes, appliances, and other equally extravegent goods.

What, we might ask, would this do for the retail economy?

It isn’t hard to figure out. Businesses would thrive, new ones would open, and the currently sluggish economy would liven up. This is not mere conjecture. There are historical examples. Even Henry Ford knew better than to underpay his workers. He wanted to sell them cars!

In addition to stimulating the private sector, a higher minimum wage would free funds that are being spent for food assistance to the poor, and result in a larger tax base. There are any number of ways that this would further stimulate the economy, by creating more public sector jobs in infrastructure and research, both of which are chronically underfunded now.

Aside from the purely financial benefits of a living wage economy, it has ethical ones as well. People who earn a decent income can consider purcheses based on factors in addition to price. Will this product work well? Is it durable? Does my purchase keep money in the community? Is it environmentally responsible? Do the people who made it earn a good living?

Does choosing it support my neighbors, our planet, and my values?

When you have no money, you can’t afford to ask. Buy an electric car? Ridiculous! I’ll just have to keep driving my old Buick Toronado with the missing catalytic converter, leaking power steering fluid, and tail pipe held in place by a wire hanger. Too bad I don’t live in a city that has light rail or I could just sell it to the crusher and ride the train.

When your income is dramatically insufficient as the minimum wage is now (such as the wage earned by the typical food worker, a twenty-nine year old parent), the ability to consider any of those ethical questions evaporates utterly, and even then the very idea of freedom from want seems impossible. People living in these sorts of circumstances cannot clearly perceive the value or benefit of democracy. Democracy itself appears rarified to the economically oppressed. In such conditions, when our corrupt national and local political classes are utterly unresponsive to the issue of poverty, freedom of every sort seems like a fantasy to the poor, and freedom from want seems to be the ultimate fantasy.

But it isn’t fantasy. It can be achieved. It is right for the people, and it is right for the nation. We just need to exercise the political will to do what is right.

Yet more reason why inequality is bad, and can even be considered a human rights issue in its sweepingly negative effects on the well-being and dignity of people. This from Inequality.org

How do inequality and health relate? Increasing evidence from scientists the world over indicates that many health outcomes — everything from life expectancy to infant mortality and obesity — can be linked to the level of economic inequality within a given population. Greater economic inequality appears to lead to worse health outcomes.

By greater inequality, epidemiologists — the scientists who study the health of populations — don’t just mean poverty. Poor health and poverty do go hand-in-hand. But high levels of inequality, the epidemiological research shows, negatively affect the health of even the affluent, mainly because, researchers contend, inequality reduces social cohesion, which leads to more stress, fear, and insecurity for everyone.

Hey, no worries. The “market” will solve this.

Yet more of the incessant litany of evidence as to why the libertarian wet dream of market purity is insane.

Speaking of inequality and health, this from Yves Smith points out the very dramatic consequences to all when collective problems are addressed through “individual incentives” and traditional capital “market forces.” I’m leaping to a specific point here, when this raises a whole hose of issues, questions, etc… which if I have time I will try to dig into with much more detail.

But this aspect of the issue is definitely brought to the fore here, in the sense that we *all* pay when this kind of inequality becomes systemic in the very processes that our society functions upon, and most importantly, responds to problems to. It also brings to mind the important point that one of America’s greatest challenges, World War II, was met and won *not* by letting the “market” solve it - but the complete opposite. The nation has never been under a more command and controlled economic structure than during that period. It took that to win that war. I’m not arguing that we should operate a society like that, but to dismiss standard libertarian and capitalist pablum about the transcendent “efficiencies” of the “market,” and that relying on those processes will achieve optimum results for society.

As for Ebola itself, the prestigious British medical journal The Lancetrecently reported how U.S. government funding for the National Health Institute, which is leading the nation’s effort in attempting to stop this deadly virus, has been reduced by the GOP-controlled Congress to its lowest levels in years. This, immediately after a harrowing surge of the disease’s spread throughout western Africa, with cases beginning to show up in North America, in which members of that same Congress were accusing the Obama administration for not devoting enough attention towards stopping.

And as the neo-liberal model continues to eviscerate core aspects of civic society, one of its more disturbing effects has been its influence upon higher education.

An excellent article on how it can be found at the heart of academia today, and its influence in the increasing use (and exploitation) of adjunct faculty, can be found in this piece by Sarah Kendzior on Academia’s Indentured Servants.

Education is only one of the many areas which have been undermined by this corrosive form of modern corporate feudalism. Incarceration through the modern, for-profit prison system comes readily to mind, as to the fate of public media, particularly public access throughout the country. We continue to see the closing of media resources available to the public (while local governments will fight to preserve their own municipal channels, which is a whole ‘nother topic).

The bottom line of all of this is the continued advancement of the idea of fee for service in order to participate in civic life or use of public resources. As Greg Boozell pointed out, ensuring equal access to civic life is being framed by neo-liberals and accepted by the public as non-essential, or as a luxury that can only be sustained through usage fees.

There certainly isn’t a magic market solution that will ensure the fiscal viability of public access TV. And market-based “solutions”are antithetical to the health vibrant public spaces.

Corporate power is resorting to literally designing image-managed Potemkin villages to hide the social and economic blight created by austerity economics. This reminds me of the many stories I used to read about similar such efforts initiated by the Soviet regime during it’s reign. One of the more notable examples of that was when a Soviet air base had all the enlisted men go out apply green paint to all the brown and dying grass and trees around the entrance to the base, so that it looked much healthier and robust to the military and party leaders who were coming on an official visit. They did the same to the decrepit and decaying facilities on the base, just painting over the holes and cracks everywhere.

This specific example is from Ireland, the country once bragged about by ‘free market’ gurus as a bright, shining success story of affirmation of their idea of economic “success” through privatization.

Hundreds of thousands of pounds have been spent on a Fermanagh facelift as the county prepares for the G8 summit in just under three weeks‚ time, but locals complain the work paid for by the local council and the Stormont Executive is little more than skin deep.

More than 100 properties within range of the sumptuous Lough Erne resort which hosts the world’s wealthiest leaders, have been tidied up, painted or power-hosed.

However, locals say the makeover only serves to hide a deeper malaise which US president Barack Obama, German chancellor Angela Merkel, French president François Hollande and others will not get to see.

Two shops in Belcoo, right on the border with Blacklion, Co Cavan, have been painted over to appear as thriving businesses. The reality, as in other parts of the county, is rather more stark.

Just a few weeks ago, Flanagan’s, a former butcher’s and vegetable shop in the neat village ˆ was cleaned and repainted with bespoke images of a thriving business placed in the windows. Any G8 delegate passing on the way to discuss global capitalism would easily be fooled into thinking that all is well with the free-market system in Fermanagh. But, the facts are different.

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The butcher’s business has been replaced by a picture of a butcher’s business. Across the road is a similar tale. A small business premises has been made to look like an office supplies store. It used to be a pharmacy, now relocated on the village main street.

Elsewhere in Fermanagh, billboard-sized pictures of the gorgeous scenery have been located to mask the occasional stark and abandoned building site or other eyesore.

Somewhat typical of the age today. Pay vast amounts to make it look healthy, rather than to have it be healthy.

UnCommon Sense TV - “David Barsamian: Occupy The Economy” Presentation by David Barsamian, producer and host of the internationally syndicated Alternative Radio program, at a public gathering at The Little Art Theatre, in Yellow Springs, Ohio, October 23rd, 2012. A noted journalist and author, Barsamian touches on a whole host of important issues, from the state of today’s media, to the increasing militarism in America’s foreign policy, and more. He gives particular focus the structural economic issues raised in the book Occupy The Economy: Challenging Capitalism which he co-authored with Richard Wolff, Professor of Economics Emeritus at the University of Massachusetts in Amherst and currently a visiting professor at the New School in New York. Wolff has also taught economics at Yale University, City University of New York, University of Utah, University of Paris I (Sorbonne), and The Brecht Forum in New York City.

Free markets are good, essential even, to the workings of a truly free society. However, when one applies ‘market’ principles to society itself, then everything becomes for sale. Including the law. And when the law and law making are determined through financial clout, you get this. Crony capitalism, a rigged game, a plutocratic banana republic. America is becoming the biggest banana republic on earth, and we seem politically unable to stop it, because we have way too many people under the spell of a political philosophy that defines any civic constraints over a financial transaction, including one for the purchase of one’s politics, as akin to “communism” or some such. Thus, we reap the society of absurd injustice that we inhabit today.

UnCommon Sense TV - “Occupy The Economy: Interview with David Barsamian” USTV’s Andy Valeri talks with journalist and author David Barsamian about his book, Occupy The Economy. Based upon eye-opening interviews with prominent economist Richard Wolff, Barsamian probes the root causes of the current economic crisis, its unjust social consequences, and what can and should be done to turn things around. While others blame corrupt bankers and unregulated speculators or the government or even the poor who borrowed, the authors show that the causes of the crisis run much deeper. Barsamian is the author of dozens of books, and is the producer and host of Alternative Radio. Wolff is Professor of Economics Emeritus at the University of Massachusetts in Amherst and currently a visiting professor at the New School in New York.

An older but still all-too-relevant article from Angus Sibley on Hayek, Novak & The Limits of Lassez Faire. This expose’ on the “cult of capitalism” is fitting in light of the rise of the GOP’s “intellectual” Paul Ryan, who manages to transcend cognitive dissonance by pledging intellectual adherence to both Ayn Rand and the Gospel of Jesus Christ.

When laissez-faire economists believe in God, they are usually certain that he is one of them. The invisible hand of the market is, they think, also the hand of Divine Providence, which anoints and protects those who manage to provide for themselves.

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Although the gulf between Hayek and mainstream Catholicism yawns wide, neoconservative Catholics have striven to bridge it. They believe that Catholic doctrine can be interpreted in such a way as to legitimize laissez-faire capitalism. Since Michael Novak is among the best-known of these Catholics, let us consider how his views reflect, but also diverge from, those of Hayek.

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But, like Hayek, Novak does not consider economic inequality a problem. “Under democratic capitalism, inequalities of wealth and power are not considered evil in themselves…. Nature itself generates inequalities,” he writes in The Spirit of Democratic Capitalism (1991). Or, as he puts it in Three in One (2000), “It is not unjust if some acorns fail to become oaks.” By contrast, in a speech he gave on May 13, 2006, Benedict XVI affirmed that “it is right to foster equality in the distribution of wealth in the world.”

Novak has argued that “productive justice” is fundamentally more important than distributive justice, for the latter depends on the former. Wealth must be produced before it can be shared. The top priority, therefore, should be to increase output, so that there will be more for everybody. This is an argument dear to many defenders of laissez-faire capitalism, but it ill accords with the evidence of recent American history: despite robust growth, inequalities have increased, while poverty and insecurity are more widespread and fewer and fewer people can afford medical care. Nor does this argument address the urgent need to curb the environmental ravages of rapid economic expansion. Novak denies that there are real limits to growth, and he decries those who see social justice as a “zero-sum game” of distributing fairly a limited pool of riches. But ecologists warn that we are already consuming the earth’s resources at a more-than-sustainable pace, even though many people are still extremely poor. The World Wildlife Fund’s Living Planet Report gives a detailed analysis covering most countries in the world. According to the report, the overall consumption of natural resources is running at a rate 25 percent above what is sustainable for our planet. It would seem, then, that there are indeed certain natural limits to economic growth.

More from the British actor and Thomas Paine re-enactor Ian Ruskin. Ruskin challenges the Foxified rantings of Glenn Beck favorite Bob Basso, whose pseudo-historical portrayals of Thomas Paine inspired Ruskin to respond with these much more historically accurate contributions on Paine, and the meaning and intention of his works.

Besides his insights on social justice, in which he reads from one of my favorite works of Paine, Agrarian Justice, you can watch Paine weigh in on the subject of SLAVERY, and what it means to be “multi-cultural” in society today. He also takes on the topic of RIGHTS AND RESPONSIBILITIES, in which he addresses an issue that is still hotly contested in politics today - the role of government and the ‘welfare state.” He also brings to light the personal smear campaigns that are waged by institutions of power against those who challenge them with cogent and effective arguments , which are just as prevalent today as they were in Paine’s time.

Paul Krugman brought something up in one of his recent blog postings which went directly to the very same point that I was thinking when I heard about Romney’s supposed campaign trail flub about liking to ‘fire’ people. I thought it was unfair to go after Romney on the rhetorical point about what so-called ‘consumer choice’ entails, when it seemed apparent to me what he was trying to mean (though using the word ‘fire’ does reveal its own contextual mindset. Another issue for another day).

It was the very subject which he was talking about when making the comment which was much more shocking, actually. Treating insurance and medical care like its some kind of brand of DVD player one is out shopping for, or is similar to quality of service at a restaurant that one shops around for, pretty much demonstrates how flagrantly out to lunch Romney is when it comes to understanding the scope of reality that ‘market economics’ actually entails in the real lives of those who aren’t billionaires.

Aaron Carroll has an excellent analysis of Mitt Romney’s faux pas on firing people. No, Romney didn’t actually say that he enjoys firing people - but what he really did say, that competition works in health care because you can fire your insurance company, was actually worse. Carroll:

The real issue, unfortunately, is that very, very few people have the luxury that Gov. Romney is endorsing. Let’s say that you are self-employed, and lucky enough to have found a company to provide you with health insurance. Then, let’s say you develop cancer. You suddenly find out that your insurance company stinks. So you fire them, right?

Of course not. You’re screwed. Now you have a pre-existing condition. There’s not an insurance company out there that wants to cover you. So you don’t fire them. You scream, and curse, and cry, but you’re stuck. Only healthy people have the luxury of picking and choosing.

Let’s also not forget that most people don’t find out that they’re not getting “good service” until they’re sick. Healthy people don’t make much use of their insurance, so they don’t know how bad it is. They only find out after they’re ill, and then it’s too late. It’s only fun to fire the insurance company if you’re sure you can go to another company to get what you need. Almost no one can.

Why, it’s as if Romney doesn’t understand his own health reform, which was in large part about ensuring not that you can fire your insurance company, but rather about ensuring that your insurance company can’t fire YOU.

And this is a bit subjective, but isn’t it awesome how Romney’s lack of empathy shines through? He evidently has no sense of what it’s like NOT to be the very wealthy son of an already wealthy father; no idea how the fear of unemployment or medical bills afflicts ordinary Americans.

The lack of empathy expressed for the experience of the large majority of Americans by ultra-rich political figures like Willard Romney continues to amaze. “United We Stand,” indeed. Yeah, sure. These people should NEVER be trusted with political power.